CJ Freshway fined 24.5 bln won for alleged unfair support for affiliate

The antitrust regulator said Tuesday it has decided to fine CJ Freshway Corp. 24.5 billion won (US$17.87 million) for unfairly supporting an affiliate in a move to solidify its market status as a major food distributor for local merchants. Since around 2010, CJ Freshway has established 11 Freshone branches nationwide jointly with small local merchants in an effort to make inroads into the local food distribution market while resolving their complaints and gradually increasing its shares in the affiliate, ultimately wholly owning it, according to the Fair Trade Commission (FTC). From 2010 through June 2024, CJ Freshway allegedly put 221 officials in key management roles at Freshone and paid them 33.4 billion won combined for payroll costs instead of the affiliate. "The business method CJ used was aimed at building an entry barrier to the industry for other competitors and avoiding conflicts with small distributors," an FTC official said. "Instead of maintaining a win-win relationship, the company has expe lled the small entities from the industry in a systemic fashion, and their due profits have been taken by the large conglomerate," he added. In addition to the penalty, the FTC ordered the company to take corrective measures. "The government will continue market monitoring of potentially unfair practices by large companies and sternly deal with them to better protect small merchants and customers," the FTC said in a release. Source: Yonhap News Agency